Ethics complaint accuses lawyer who pursued porn downloaders of evasive testimony, money maneuvers
An ethics complaint accuses a Minneapolis lawyer of testifying falsely and failing to pay attorney fees assessed against him in connection with hundreds of suits he filed to pursue porn downloaders.
The Minnesota Lawyers Professional Responsibility Board is seeking suspension or disbarment for the lawyer, Paul Hansmeier, report MPR News, the Minneapolis Star Tribune and TechDirt, which links to the complaint (PDF).
Hansmeier has switched from seeking copyright settlements from porn downloaders to filing suits against small businesses that fail to comply with disability access laws, the Star Tribune says.
In the porn litigation, Hansmeier had joined with two Illinois lawyers to seek the identities of illegal downloaders associated with Internet Protocol addresses. Once the names were obtained, the lawyers would send demand letters threatening suit unless settlements of up to $4,000 were paid.
One of the Illinois lawyers is also facing an ethics complaint and the other has since died, according to TechDirt.
The ethics complaint quotes a May 2013 opinion by a Los Angeles federal judge who had criticized the lawyers’ tactics. The judge wrote that “copyright laws originally designed to compensate starving artists” allowed lawyers seeking easy money to “plunder the citizenry.”
In one case, the ethics complaint alleged, the lawyers’ law firm, Prenda Law, reached an agreement with an illegal downloader willing to be sued and to give up his bit-torrent log, which would provide IP addresses of potential defendants. Prenda Law would supply a pro bono lawyer for the downloader and would dismiss the suit after receiving the bit-torrent log, according to the complaint. Hansmeier allegedly denied any agreement at a court hearing.
The complaint also alleged that Hansmeier transferred $80,000 from his firm Alpha Law to his personal account in March 2013 and disbanded the company in August 2013, stating that all debts and obligations had been paid. The next month a judgment was entered against Alpha and others to pay $63,000 in attorney fees representing Internet service providers who sought to quash subpoenas. In another case, a federal court ordered Hansmeier and two other lawyers in November 2013 to pay $261,000 in attorney fees.
The complaint also accused Hansmeier of making false statements about his involvement with a company called Monyet LLC, which received a $75,000 check from Alpha Law. The complaint cites this testimony:
Q.”Do you know what Monyet, LLC, is? “
Hansmeier: “It’s presumably a limited liability company.”
Q. “I see you’re the signatory to the check and you’re also the signatory on the back of the check. You don’t know what Monyet, LLC is?”
Hansmeier: “To the best of my recollection, the Monyet, LLC entity is simply an account associated with estate planning but I don’t know—the reason. I can’t tell you how it operates within the whole estate planning scheme is because I did not set up the estate planning myself that’s something that’s well beyond my expertise. …”
Q. “Whose estate planning then?”
Hansmeier: “It’s just setting up a trust for well now my son I guess he would be the beneficiary of it.”
Hansmeier later opened a brokerage account with Scottrade and a business account with TCF Bank in Monyet’s name, the complaint says. He also authorized wire transfers of $590,000 from the Monyet account, including transfers of $115,000 to his new law firm, Class Justice, and $280,000 to his wife, according to the complaint.
Hansmeier is also accused of falsely denying any formal involvement with Prenda Law when claiming he had not received notice of a motion seeking attorney fees. The opinion cites this exchange in which Hansmeier repeatedly asserts he entered an appearance in a case on behalf of Alpha Law, not Prenda Law:
The court: “I’m talking about previous and other litigation. I mean, judges have even commented on that, I believe. Am I reading the record wrong? Is this your first time associating with Prenda law firm?”
Hansmeier: “I think in this—well, I have appeared as counsel of record in this case through Alpha Law Firm. I believe there was a signature block in this case with …”
The court: “I didn’t ask you that question. I’m talking about other cases in other venues at other times.”
Hansmeier: “I’m trying to wrack my memory. I don’t know of another appearance I have had for Prenda law firm. I can’t think of one.”
Hansmeier filed for bankruptcy in July 2015. According to the Minneapolis Star Tribune, the bankruptcy trustee argues Hansmeier sought protection from creditors in bad faith and alleges he tried to evade discovery on the fraudulent transfer of assets.
